CLSA upbeat on Infosys under Murthy

CLSA upbeat on Infosys under Murthy

Brokerage firm CLSA, which had created a flutter in the market last year by writing an open letter to Infosys’ chief executive officer to convey investors’ ‘frustration’ with the company, has now exuded optimism on the new found direction with N R Narayana Murthy at the helm.

In a recent report, prepared after Murthy’s address to shareholders at the company’s annual general meeting last week, CLSA said Murthy’s assurance on changing some of his long-held beliefs showed he ‘is not rooted in the past’.

This means the company is now ready to offer flexible pricing to clients and sacrifice margin for the sake of growth.

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Image: NR Narayana Murthy, Founder and Chairman, Infosys, during an interview with Reuters at the company's office in Bengaluru.Photographs: Vivek Prakash/Reuters

CLSA upbeat on Infosys under Murthy

In a report prepared in April 2012, it had written a letter to S D Shibulal, managing director and CEO, saying investors were showing a rare frustration over the company’s performance.

“. . . the key question on every shareholder’s mind is what is troubling the company, which has been the flag-bearer of the Indian IT (information technology) industry globally and single-handedly raised the profile of Indian equities among foreign institutional investors,” went their report, authored by analyst Nimish Joshi, at that time.

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Image: Employees walk in front of a pyramid-shaped building at the Infosys campus in the Electronic City area of Bengaluru.Photographs: Vivek Prakash/Reuters

CLSA upbeat on Infosys under Murthy

As a part of his focus on the short term (six to 12 months), Murthy has said he will focus on Infosys’ traditional businesses, including indicated custom applications, business process outsourcing and infrastructure management.

“These areas have the potential to accelerate revenue growth in the near term and Infosys’ key target remains to enhance the win ratios in large outsourcing deals,” the report said.

However, high-end consulting and enterprise businesses and intellectual property-led platforms and solutions are critical from a three to five-year perspective, it added.

Image: Employees walk in a forecourt at the Infosys campus in the Electronic City area of Bengaluru.Photographs: Vivek Prakash/Reuters